Franklin California v. Commonwealth of Puerto Rico

In a gathering storm of multibillion-dollar disputes involving the insolvent Commonwealth of Puerto Rico, the first win went to a group of bondholders on July 6, when the U.S. Court of Appeals for the First Circuit struck down a law that would have allowed the commonwealth's public utilities to seek bankruptcy protection.

The decision, which affirmed a district court ruling in February, is a blow to Puerto Rico's debt restructuring efforts, and a victory for debt holders that opposed the law. It comes as Puerto Rico is increasingly desperate to restructure some $72 billion in public debt, nearly half involving its utilities and the rest related to other government-guaranteed bonds. It leaves the government with fewer options as it tries to work toward a consensual deal involving its public power company's debt by a September deadline.